Thinking About Starting a DPC Practice? Here’s What to Know First

Starting a Direct Primary Care (DPC) practice is a big decision—and one that offers exciting opportunities for physicians to put patients back at the center of care. By stepping away from the traditional insurance model, DPC physicians gain more time with patients, enjoy greater clinical autonomy, and build stronger relationships.

While it’s natural to focus on building your business, like setting prices, choosing services, and considering your ideal patient profile, it’s also important to understand the legal considerations that come with starting a DPC practice.

To help you navigate those particular challenges, we turned to Dr. Phil Eskew, a leading academic expert on the DPC model. He brings a unique perspective shaped by experience as a practicing DPC physician, attorney, and policy advocate. He is also the founder of DPC Frontier, frequently speaks on legal issues in DPC, and supports clinicians through research, resources, and consulting. Read on as he highlights five key legal factors every new or transitioning physician should consider.

1) Minimize Your Insurance Risk

Many providers make the switch to Direct Care to avoid having to deal with insurance companies. Stepping away from insurance billing can be one of the most liberating parts of starting a DPC practice

And, while it’s exciting to break ties with insurance companies, Eskew notes that it’s important that your contract clarifies that the monthly fee you charge your patients is for ongoing primary care. If patients or the state insurance commissioner were to think that the agreement took on too much risk, you could face criminal charges for the unlawful sale of insurance.

Initial steps to reduce your risk include defining the scope of your primary care services, defining limits on the number of visits per patient and the size of the patient panel, and specifically stating in the Direct Care contract that the agreement is NOT insurance.

2) Break Traditional Insurance Ties

In addition to making sure your patient contract clearly defines your scope of services, Eskew thinks it’s critical for Direct Care providers to appropriately “opt out” of Medicare. According to him, failure to do this and avoid standard Medicaid and third party insurance contracts can have serious legal implications for your practice.

Medicare participating physicians are prohibited from charging Medicare patients outside of the standard third party fee for service system, which includes things like membership fees. Most private contracts take the same approach, and insurance companies have filed suit against Direct Care physicians alleging breach of contract when those physician billed patients on a membership basis rather than via the standard fee for service terms of the contract.

3) Follow Applicable State Direct Care Regulations

According to the DPC Coalition, as of 2024, approximately 34 states have enacted laws that generally define DPC as a medical service outside of state insurance regulations. It's recommended that you look to your state requirements when designing your Direct Care practice. Some states offer greater autonomy and protections, while others have onerous payment, registration, and reporting requirements.

4) Monitor In-Office Dispensing Rules

Direct Care providers commonly dispense medications directly to patients. Eskew says this decision is popular among providers because it routinely allows for deep discounts on prescription medication costs, saves patients an additional trip to the pharmacy, and allows the provider to closely monitor patient adherence to prescribed therapies. But while this popular practice can further lower the cost of care, in-office medication dispensing is regulated on the state level, and some states prohibit providers from dispensing medications directly to patients from their office. (Check out Pharmalink's map outlining each state's dispensing regulations as a starting point.)

5) HIPAA Still Applies to Your Practice

While you celebrate the anticipated freedom that comes from opting out of Medicare and other government programs, Eskew says it’s important to note that HIPAA still applies to practices that store health information in ANY electronic format

According to Eskew, even if your practice relies exclusively on paper charts and has no computer system, your decision to simply use a photocopier (which will temporarily store protected health information electronically) means that HIPAA applies to your practice. Make sure you are familiar with the “HIPAA Final Rule” and that your practice follows recommendations for remaining HIPAA compliant.

As you prepare to launch your practice, it's important to invest some time in understanding how your state treats and regulates Direct Care practices. For many providers this means doing their own research and eventually talking to a legal professional who can help them navigate the process and understand how their business model fits within state and federal laws. 

Taking the First Step with Confidence

Launching a DPC practice means stepping into a model that prioritizes relationships, transparency, and patient-centered care. While navigating the legal and regulatory landscape can feel daunting at first, taking the time to understand these foundations can set your practice up for long-term success. If you are looking for Legal Counsel, our partners Frier Levitt Attorneys at Law are experts in Healthcare Law, specifically around DPC. 

You won't have all the answers right away. The DPC community is full of clinicians who have walked this path and are generous with their insights—Hint Community can be a helpful resource to physicians at any stage of DPC. Pair that support with trusted legal guidance, and you’ll be well on your way to building a practice that reflects your values, and better serves your patients.

Looking for more resources? Check out our DPC Playbook for step-by-step guide on starting, managing, and growing your Direct Care practice.  Or explore our partner ecosystem, a library of vetted companies that align with our mission to power Direct Care and make it the new standard in healthcare.

This article was originally posted September 2021, and updated April 2025.